Setting up a new company involves a lot of rules and red tape to stay above board - just having the proper business forms goes a long way here. In this post, we’ll share documents, laws, and tips that any new enterprise should know.
Defining Your Business Structure
Even how you define your business in the eyes of the law could have serious implications. If you decide on an LLC, you won’t have to worry about business debts taking your personal assets. The major choices here include:
- Sole proprietorships, where you’re liable but have complete control
- Limited partnerships, where only one partner has liability
- Limited liability partnerships, where partners aren’t liable for each other
- Corporations, which are distinct legal entities with shareholders
- Limited liability company, where you have no liability for the enterprise
Only choose the structure that fits how you plan to govern the business.
Document Templates Your Company Might Need
Setting up a company takes time; at least some of this is usually putting contracts and other key forms together. Document template sites let you access common business agreements at a low cost. Here are just some of the forms you’ll likely need:
- Employee agreement: These contracts set out the terms of each worker’s employment, including whether they’ll work part-time or full-time, their salary, and the notice period.
- Freelancer contract: Some small or new firms rely on freelancers instead. These often come with different terms (such as flexible hours), so always use a different contract.
- Partnership agreement: These forms help you set up a partnership with someone - this can split a firm’s profits and duties 50/50 or according to each partner’s contributions.
- Cease and desist letter: If somebody misuses your IP, you can send them a cease and desist letter; this usually states that you plan to pursue legal action if they continue.
- Non-disclosure agreement: These forms swear a team to secrecy, stopping them from leaking company secrets or revealing sensitive details without serious consequences.
- Non-compete agreement: Similarly, these documents stop employees from working for a competitor, usually for at least a few years after they finish working with you.
- Shareholder agreement: These forms outline your shareholders’ responsibilities to the company; without this, confusion can harm your firm before it gets off the ground.
Arranging IP Protection
Cease and desist letters only work if you protect your property - this makes it illegal for bad-faith actors and competitors to steal your IP. Here are the main types of IP you must protect:
Trademark
This is a design or phrase that sets your company apart, such as a slogan or logo. You must file a trademark application as quickly as possible; this also prevents others from using a logo that’s deliberately similar to yours (barring Fair Use).
Patent
A patent is reserved for technical processes and inventions you created and don’t want a rival to replicate. This gives you exclusive access to that creation and lets you reap the benefits without other people selling a cheap facsimile.
Copyright
Creating a work automatically protects you as its author or owner. Under existing copyright law, you can stop people from reproducing, performing, or displaying your work. However, you must again make allowances for Fair Use, such as parodies.
Important Employment Laws
The specific laws your company has to follow usually depend on its current number of workers - some only kick in with 50 or more employees. However, even small startups have plenty of rules to account for. Here are six major employment laws that might affect your firm:
- Affordable Care Act: Any firm with 50 or more employees must offer a health insurance plan. Smaller enterprises that offer this are eligible for tax credits and other benefits.
- Fair Labor Standards Act: The FLSA sets rules for minimum wage, overtime, and even the specific number of working hours - make sure you abide by these.
- Americans with Disabilities Act: You must be able to guarantee reasonable provisions and accommodations for disabled staff if you have 15 or more employees.
- Civil Rights Act: This federal law bans discrimination against staff members based on their race, sex, religion, orientation, or gender and covers sexual harassment claims.
- Family and Medical Leave Act: If your firm grows to 50+ workers, the FMLA requires you to offer up to twelve weeks of unpaid family/medical leave.
- Occupational Safety and Health Act: Businesses of all sizes across the US must have a safe working environment, correct hazards, and provide free PPE.
You must also ensure your company adequately differentiates between full-time employees and freelance contractors, such as by using W-2 and 1099 forms, respectively, for each.
Final Thoughts
Your startup can only thrive if it has the proper documents and follows the right rules, especially as it grows into a larger enterprise. With due diligence and accurate document templates, you’ll have everything you need to avoid legal troubles.
